Note 7 - Notes and Loans Payable

12 Months Ended

Dec. 31, 2017

NOTE 7 – Notes and Loans Payable

Notes and loans payable consist of:
	December 31, 2017	December 31, 2016
Convertible note payable to lender dated February 1, 2016 (as amended December 21, 2016), interest at 12% per annum, due February 1, 2017, convertible into Common Stock at a Conversion Price equal to the Lesser of (i) $0.01 per share or (ii) 50% of the lowest Bid Price of the Common Stock for the 30 Trading Days preceding the Conversion Date –fully converted at February 13, 2017	$ -		$ 3,571

Convertible notes payable to lender dated from March 15, 2016 (as amended June 2, 2016) to November 15, 2017, interest at rates ranging from 12% to 14.99% per annum, due from April 6, 2017 to May 15, 2018, partially converted at March 22, 2017 and the remaining notes convertible into Common Stock at a Conversion Price equal to the lesser of (i) $0.01 per share or (ii) 50% of the lowest Closing Bid Price of the Common Stock for the 30 Trading Days preceding the Conversion Date – net of unamortized debt discount of $1,815 and $34,411, respectively	36,685		39,839

Convertible notes payable to lender dated February 1, 2016 (as amended December 21, 2016) and December 21, 2016, interest at 12% per annum, due February 1, 2017 and May 20, 2017, convertible into Common Stock at a Conversion Price equal to the lesser of (i) $0.01 per share or (ii) 50% of the lowest Closing Bid Price of the Common Stock for the 30 Trading Days preceding the Conversion Date – net of unamortized debt discount of $0 and $58,095, respectively	65,000		6,905

Convertible notes payable to Pasquale and Rosemary Ferro dated from May 2, 2017 to October 13, 2017, interest at 12% per annum, due from September 16, 2017 to May 7, 2018, convertible into Common Stock at a Conversion Price equal to the lesser of (i) $0.01 per share or (ii) 50% of the lowest Closing Bid Price of the Common Stock for the 30 Trading Days preceding the Conversion Date – net of unamortized debt discount of $19,613 and $0, respectively	73,887		-

Convertible note payable to lender dated August 8, 2017 interest at 12% per annum, due August 8, 2018, convertible into Common Stock at a Conversion Price equal to the lesser of (i) $0.01 per share or (ii) 50% of the lowest Closing Bid Price of the Common Stock for the 30 Trading Days preceding the Conversion Date – net of unamortized debt discount of $15,068 and $0, respectively	9,932		-

Note payable to brother of Marco Alfonsi, Chief Executive Officer of the Company, interest at 10% per annum, due August 22, 2016 (now past due)	5,000		5,000

Loan payable to Mckenzie Webster Limited (“MWL”), an entity controlled by the former Chairman of the Board of Directors of the Company, non-interest bearing, due on demand	3,000		3,000
Total	$ 193,504		$ 58,315

The derivative liability of the convertible notes payable consists of:

	December 31, 2017				December 31, 2016
	Face Value		Derivative Liability		Face Value		Derivative Liability

Convertible note payable to lender dated February 1, 2016 (as amended December 21, 2016), due February 1, 2017		$ -		$ -		$ 15,000		$ 31,429

Convertible notes payable to lender dated from March 15, 2016 (as amended June 2, 2016) to November 15, 2017, due from April 6, 2017 to May 15, 2018		$ 38,500		$ 248,597		$ 74,250		$ 171,841

Convertible notes payable to lender dated February 1, 2016 (as amended December 21, 2016) and December 21, 2016, due February 1, 2017 and May 20, 2017		$ 65,000		$ 418,889		$ 65,000		$ 149,418

Convertible notes payable to Pasquale and Rosemary Ferro dated from May 2, 2017 to October 13, 2017, due from September 16, 2017 to May 7, 2018		$ 93,500		$ 611,886		$ -		$ -

Convertible notes payable to lender dated August 8, 2017, due August 8, 2018		$ 25,000		$ 171,765		$ -		$ -

Totals		$ 222,000		$ 1,451,137		$ 154,250		$ 352,688

The above convertible notes contain a variable conversion feature based on the future trading price of the Company common stock. Therefore, the number of shares of common stock issuable upon conversion of the notes is indeterminate. Accordingly, we have recorded the fair value of the embedded conversion features as a derivative liability at the respective issuance dates (or amendment dates) of the notes ($445,112 and $629,828 total for the year ended December 31, 2017 and 2016) and charged the applicable amounts to debt discounts ($182,750 and $154,250 total for the year ended December 31, 2017 and 2016) and the remainder to other expense ($262,362 and $475,578 total for the year ended December 31, 2017 and 2016). The increase (decrease) in the fair value of the derivative liability from the respective issuance dates (or amendment dates) of the notes to the measurement date ($926,819 total increase and $277,140 total decrease for the year ended December 31, 2017 and 2016) are charged (credited) to other expense (income). The fair value of the derivative liability of the notes is measured at the respective issuance dates and quarterly thereafter using the Black Scholes option pricing model. Assumptions used for the calculations of the derivative liability of the notes at December 31, 2017 include (1) stock price of $0.0335 per share, (2) exercise price of $0.0045 per share, (3) terms ranging from 0 days to 220 days, (4) expected volatility of 287% and (5) risk free interest rates ranging from 0.00% to 1.58%. Assumptions used for the calculations of the derivative liability of the notes at December 31, 2016 include (1) stock price of $0.029 per share, (2) exercise price of $0.01 per share, (3) terms ranging from 32 days to 242 days, (4) expected volatility of 243% and (5) risk free interest rates ranging from 0.46% to 0.65%.